During the Crap Sandwich 2.0 debate (such as it was, what with the Paulson/Bush/Pelosi/Reid gun to our heads), the Hill’s few staunch conservatives were derided by Chicken Littles in both parties for warning about the unintended consequences of massive bailouts.
The bailout opponents were mocked for their “ideological purity.”
Their intellect was doubted.
Now, with the floodgates wide open and every last corporate special interest clamoring for a piece of CS2.0, the Chicken Littles are horrified at what the bailout opponents knew would happen all along.
Noooooobody could see the subprime crisis coming, the bailout boosters claimed as the blind Paulson led his blind followers along.
Nooooobody could see this mega-bailout orgy coming, they will now cluck.
It’s been on the horizon for more than a year.
If you didn’t see this coming, pro-bailout Republicans, you don’t deserve leadership positions in the party that is supposed to stand for fiscal conservatism and the free market. And you certainly don’t deserve to complain about the outcome with any shred of credibility. The blind should step aside and let those with 20/20 vision take over. We need a fiscal conservative counterinsurgency that fights with foresight, not in hindsight:
When the government said it would spend $700 billion to rescue the nation’s financial industry, it seemed to be an ocean of money. But after one of the biggest lobbying free-for-alls in memory, it suddenly looks like a dwindling pool.
Many new supplicants are lining up for an infusion of capital as billions of dollars are channeled to other beneficiaries like the American International Group, and possibly soon American Express.
Of the initial $350 billion that Congress freed up, out of the $700 billion in bailout money contained in the law that passed last month, the Treasury Department has committed all but $60 billion. The shrinking pie — and the growing uncertainty over who qualifies — has thrown Washington’s legal and lobbying establishment into a mad scramble.
The Treasury Department is under siege by an army of hired guns for banks, savings and loan associations and insurers — as well as for improbable candidates like a Hispanic business group representing plumbing and home-heating specialists. That last group wants the Treasury to hire its members as contractors to take care of houses that the government may end up owning through buying distressed mortgages…
…Meanwhile, the list of candidates for a piece of the bailout keeps growing.
On Monday, the Treasury announced it would inject an additional $40 billion into A.I.G., amid signs that the government’s original bailout plan was putting too much strain on the company. American Express won approval Monday to transform itself into a bank holding company, making the giant marketer of credit cards eligible for an infusion.
Then there is the National Marine Manufacturers Association, which is asking whether boat financing companies might be eligible for aid to ensure that dealers have access to credit to stock their showrooms with boats — costs have gone up as the credit markets have calcified. Using much the same rationale, the National Automobile Dealers Association is pleading that car dealers get consideration, too.
“Unfortunately, I don’t have a lot of good news for them individually,” said Jeb Mason, who as the Treasury’s liaison to the business community is the first port-of-call for lobbyists. “The government shouldn’t be in the business of picking winners and losers among industries.”
Mr. Mason, 32, a lanky Texan in black cowboy boots who once worked in the White House for Karl Rove, shook his head over the dozens of phone calls and e-mail messages he gets every week. “I was telling a friend, ‘this must have been how the Politburo felt,’ ” he said.
The Congressional bailout law gave the Treasury broad authority to decide how to spend the $700 billion. Under the terms of the $250 billion capital purchase program announced last month, cash infusions are available to “qualifying U.S. banks, savings associations, and certain bank and savings and loan holding companies, engaged only in financial activities.”
That definition has grown to include private banks and insurers like Allstate and MetLife, which own savings and loans. It may also encompass industrial lenders like GE Capital and GMAC, the financing arm of General Motors, provided they win approval to reclassify themselves as a bank or savings and loan holding company.